Union Parliamentary Affairs Minister Kiren Rijiju announced on Thursday, 16 July 2026 that the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved Semicon 2.0 — a comprehensive programme for India's semiconductor design and manufacturing ecosystem — with a total budget outlay of ₹1,27,500 crore.

Context

Rijiju, posting on X, described the Cabinet decision as 'a major boost to India's semiconductor ecosystem.' The approval of Semicon 2.0 marks a significant escalation in the government's ambition to build end-to-end chip capabilities on Indian soil, covering both design and manufacturing. The announcement was part of a broader set of Cabinet decisions taken at Wednesday's meeting.

The ₹1,27,500 crore outlay is a substantial step up from the ₹76,000 crore committed under the original Semicon India programme approved in December 2021, which had set out to establish semiconductor and display manufacturing facilities across the country.

Policy Backdrop

India's semiconductor push began in earnest in 2021 under the India Semiconductor Mission (ISM), itself part of the broader Atmanirbhar Bharat framework championed by PM Modi. The ISM provided design-linked incentives, support for fabrication units, and backing for assembly, testing, marking and packaging (ATMP) facilities.

Successive Cabinet approvals since then have sought to attract global chipmakers and build domestic capacity, responding to worldwide chip shortages that exposed the risks of heavy dependence on East Asian supply chains. Semicon 2.0 represents the next generational push in that policy lineage, with a significantly larger financial commitment signalling a more mature and expansive programme architecture.

Stakeholders and Impact

The programme is expected to benefit a wide range of actors — from global chip manufacturers and electronics firms seeking to diversify production bases, to domestic startups working in semiconductor design. India's growing consumer electronics, automotive, defence and telecommunications sectors are all heavily dependent on imported chips, making domestic capacity a strategic priority.

For Arunachal Pradesh and other frontier states, improved electronics manufacturing capacity also carries national security implications, as reliable domestic chip supply underpins defence electronics. Broader industrial clusters in states such as Gujarat, Telangana, Karnataka and Tamil Nadu — which have already attracted semiconductor-adjacent investments — stand to gain from expanded incentive structures under the new programme.

What's Next

The Cabinet approval sets the policy and financial framework; project-level clearances for individual fabrication plants, design centres and assembly units are expected to follow in the coming months. Partnerships with global foundries and further announcements on specific facility locations will be closely watched by the industry. The scale of the ₹1,27,500 crore commitment signals that the government intends Semicon 2.0 to be a decade-defining industrial programme, positioning India as a credible node in global semiconductor supply chains.